Vancouver home sales down second month after foreign owners tax

Reuters Staff

2 Min Read

TORONTO (Reuters) - Home sales in the Vancouver region’s heated housing market fell for the second consecutive month after the province introduced a tax on foreign home ownership, the Real Estate Board of Greater Vancouver said on Tuesday.

In a statement, the board said September’s sales were at 2,253 homes, down 32.6 percent on a year-to-year basis and down 9.5 percent from August, the first full month after British Columbia announced a 15 percent tax on foreign buyers.

Soaring prices in Canada’s two most expensive markets, Toronto and Vancouver, have raised concerns about a bubble and speculation by foreigners, mostly from mainland China. Home prices in Toronto and Vancouver have more than doubled in the last 11 years.

The Canadian government said on Monday it will tighten mortgage rules and close a tax loophole on home sales, seeking to rein in both foreign investors and indebted consumers in its latest move to cool the market.

The board said Metro Vancouver’s September home sales dipped below the 10-year monthly sales average for the first time since May 2014.

A benchmark price for home prices in the region is at C$931,900 ($709,074), a 28.9 percent increase compared with September 2015, but a 0.1 percent decline compared with August, the board said.

”Changing market conditions are easing upward pressure on home prices in our region,” board president Dan Morrison said in the statement.

Vancouver home sales fell sharply in August after its tax on foreign buyers, and policymakers there also promised to tax vacant homes to discourage absentee investment from overseas.

Some believe those measures just drove foreign investors eastward to Toronto, forcing the government to act again.

On Monday’s federal announcement, analysts have said the measures will likely send overseas buyers to other markets while raising mortgage costs at home.

Reporting by Ethan Lou in Toronto; Editing by Meredith Mazzilli and Marguerita Choy